Differences between on premises, saas and hosted ERP licenses - ASW

What is the difference between “on premises”, “saas” and “hosted” ERP licenses?

What is the difference between “on premises”, “saas” and “hosted” ERP licenses?

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One of the major choices faced by any company wishing to deploy an ERP system is the deployment model that it chooses and the hardware infrastructure.

Will you rely on a traditional implementation with your own server? Or will you choose a hosted solution or Saas one?

What is the difference between the three and how does a company decide between one of the three options?

First of all, it is important to define solid definitions for each type of ERP implementation approach:

  • On premise

    On-premise licenses imply a consistent financial effort at the beginning of the implementation process because all the investment related to licenses, servers, hardware, maintenance will be made entirely from the beginning by the client. All of these are responsible for software operation. You need to acquire network infrastructure, ensure permanent power supply, servers, operating system, database software, etc. You must also have a team of specialists to ensure that the system works and is updated. If you already have a team of IT specialists that do not have ERP skills, you may need to invest in their training too.

  • Hosting

    Hosting means purchasing ERP licenses from a vendor, but instead of buying all the hardware and infrastructure components, you can choose to buy hosting services from a third party / IT infrastructure company. Infrastructure management is done by that third party, which guarantees that the solution works at your desired speed, within the indicated time range. In this case, by outsourcing hardware and maintenance costs – you do not need to have an IT department within the company. You will still be the owner of the purchased software.

  • Saas

    Using a Software-as-a-Service (Cloud) subscription model, you do not have to purchase ERP licenses or necessary equipment. The only cost is a monthly fee for cloud services that includes servers, networks, maintenance and software licenses provided.

If you already have the necessary infrastructure and intend to keep it, it might be logical to do a traditional deployment.
If you have an IT infrastructure, but it’s difficult for you to keep it and you may not have enough IT staff, a hosted solution will allow you to keep current software licenses while using somebody’s servers and network.
If you have neither the infrastructure nor the money or the desire to buy anything, the cloud (Saas) is the right solution.
In the long run, a monthly subscription might be the right solution for a new business, as it is a predictable monthly fee that includes licenses, maintenance, equipment and staff to ensure the correct operation of the ERP solution. This option can only be chosen if ERP software works online.

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